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Red Hat is the largest and most profitable open source company. It produces Red Hat Enterprise Linux (RHEL) and sponsors Fedora, one of the most well-known versions of desktop Linux.
And now, it’s being bought by IBM $34 billion, IBM’s largest acquisition ever. This is big news in the broader tech sphere, but it’s especially large in the open source world.
What does this mean for IBM, Red Hat, and the open source world in general?
1. IBM Is Now the Largest Cloud Service Provider
IBM may not be on your radar when you think of the cloud. That’s because IBM doesn’t provide consumer services like Dropbox and Office 365. It instead offers a catalog of products developers can use to keep such services running. IBM works with large clients such as healthcare companies and airlines.
IBM competes with Amazon and Microsoft to provide cloud infrastructure. By purchasing another big player, the combined business is enough to spring IBM up to the number one spot.
That’s why this is big news regardless of whether you’ve ever heard of Red Hat or open source. IBM is spending top dollar in order to be a top player. And developers will use its products to create and power much of the online services you interact with regularly.
2. Red Hat Will Still Be Red Hat
Red Hat’s name isn’t suddenly changing to IBM. According to the press release, Red Hat will become a distinct unit under IBM’s Hybrid Cloud team. The brand isn’t going away. Nor does it look like the North Carolina-based company will be closing down office space either.
IBM intends to use its cash expanding Red Hat’s existing relationships, including competing with products such as Amazon Web Services and Microsoft Azure.
Jim Whitehurst will remain president and CEO. Other leadership will also stay on board.
Whitehurst believes the acquisition will provide Red Hat will the resources to expand what it’s already doing, increasing the spread of open source technology and adoption.
3. Don’t Expect Major Changes to the Linux Desktop
IBM doesn’t seem intent on shaking things up, and that appears to be the case for the Linux desktop as well. Here’s a quote from the press release:
“With this acquisition, IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem.”
To clarify things, let’s first look at the relationship between Fedora and RHEL, Red Hat’s flagship product. Fedora is a community-developed Linux-based operating system that Red Hat sponsors. When the time comes to produce a new version of RHEL, Red Hat takes a version of Fedora and begins turning it into a stable enterprise product.
So a commitment to Red Hat’s “development model” and “developer ecosystem” means a commitment toward keeping the existing system in place. So does “GPL Cooperating Commitment,” for it’s the GPL license that has kept much of the Linux desktop free over the years.
While it would nice if the increase in capital from IBM translated to improvements to desktop Linux, that’s not why money changed hands. IBM is interested in dominating the cloud, not the desktop.
4. IBM Is Now a Bigger Name in Open Source
IBM is not among the first names that come to mind when thinking of open source companies. But while IBM hasn’t been pushing a Linux-based operating system of its own, it has contributed to the open source ecosystem for years.
It also utilizes open source code, especially for its cloud platform. The company has a website that details how it views open source code, community involvement, and open culture.
That doesn’t mean the work IBM produces has been (or will become) open source. Like many giant corporations, it takes a pragmatic (rather than ethic) approach to open source code. Teams contribute to open source projects when they see a benefit, and they avoid it when they don’t.
Yet now that IBM has bought one of the most high-profile darlings of the open source industry, you can expect to see its name come up in the context of open source more often.
5. This Isn’t the First Time This Has Happened
Before Red Hat hit the scene, SUSE was an established player in the Linux enterprise market. The two companies have grown up as two successful examples of sustaining open source development by prioritizing on corporate support contracts, while at the same time nurturing open source communities like openSUSE.
Novell acquired SUSE way back in 2003. Then Attachmate bought Novell in 2011, getting SUSE in the process. Attachmate seperated Novell and SUSE into two autonomous subsidiary companies. Then SUSE became its own business unit when Attachmate and Micro Focus merged in 2014. In the summer of 2018, EQT announced plans to buy SUSE.
All the while, openSUSE and SUSE Enterprise Linux have remained stable, relatively consistent products. We could see a similar dynamic play out with Fedora, Red Hat, and IBM.
Are You Happy About the Acquisition?
As with anything, that depends on your perspective. Red Hat will get an infusion of cash from this deal that will enable it to do more of what it’s doing. Though as part of IBM, it will have to give some thought to the priorities or concerns of its parent company.
Red Hat may become a bigger and better open source company than ever, but it’s no longer entirely free to chart its own course.
On the other hand, money matters. Canonical cancelled Unity8 and Ubuntu Touch due to financial concerns over the high cost of these initiatives. It may have been free to experiment, but at the end of the day, you have to pay the bills. In the open source world, that remains a tricky task.